Seagate to Buy Maxtor

Well, the folks at Seagate must have been jealous of all the attention NVIDIA received after announcing their recent acquisition of ULI because the company has just announced its intention to acquire Maxtor. For the time being, the two companies will remain separate. However, it will be interesting to see what new types of technologies and pricing we'll see once the two drive vendors merge and begin operating as a single company.

SEAGATE and Maxtor confirmed the acquisition. The deal is worth $1.9 billion. The firms said the combination will be 10-20% accretive on a cash EPS basis after the first full year of combined operations. The combined company will save around $300 million in operating expenses after the first full year of integration, Seagate said. The transaction will be completed in the second half of next year. If the deal falls apart, Maxtor will pick up $300 million. The two firms will continue as separate companies until the close of the deal.